PROVIDENCE – Rhode Island ranks in the bottom third among states based on business-friendly tax climates, according to a new report by the Tax Foundation published on Wednesday.
The 2021 State Business Tax Climate Index compares tax policies across 50 states for competitiveness and impact on businesses, scoring each with an overall rank, as well as individual scores based upon corporate, individual income, sales, property and unemployment insurance taxes.
Rhode Island ranked 37th overall, a slight improvement over its #39 ranking the year prior. The Ocean State also scored lower than its overall score in terms of property taxes (rank of 42) and corporate taxes (39) but better in individual income taxes (29), sales taxes (25) and unemployment insurance taxes (30).
Rhode Island also outranked neighboring Connecticut, which at an overall rank of 47 was among the 10 worst states for business-friendly tax environments. Massachusetts ranked 34th.
Rhode Island also boasts one of the highest state sales taxes at 7% and the second-highest tobacco taxes at $4.25 per pack, the report stated.
The report emphasized the importance of state tax policies to businesses, informing in some cases where they choose to move or locate, job creation and growth, profits and, in turn, the overall state economy.
